University of Rhode Island DigitalCommons@URI Open Access Master's Theses 1979 ECONOMIC DEVELOPMENT IN RHODE ISLAND POLICIES AND STRATEGIES David R. Westcott University of Rhode Island Follow this and additional works at: https://digitalcommons.uri.edu/theses Recommended Citation Westcott, David R., "ECONOMIC DEVELOPMENT IN RHODE ISLAND POLICIES AND STRATEGIES" (1979). Open Access Master's Theses. Paper 395. https://digitalcommons.uri.edu/theses/395 This Thesis is brought to you for free and open access by DigitalCommons@URI. It has been accepted for inclusion in Open Access Master's Theses by an authorized administrator of DigitalCommons@URI. For more information, please contact [email protected]. ECONOMIC DEVELOPMENT IN RHODE ISLAND POLICIES AND STRATEGIES BY DAVID R. WESTCOTT A THESIS PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF COMMUNITY PLANNING UNIVERSITY OF RHODE ISLAND 1979 MASTER OF COMMUNITY PLANNING THESIS PROJECT OF DAVID R. WESTCOTT Approved: I Major Prof'essor n Community Planning and UNIVERSITY OF RHODE ISLAND 1979 ACKNOWLEDGEMENTS I would like to thank President Frank Newman of the University of Rhode Island who was instrumental in my in­ volvement with economic development in Rhode Island. I would also like to thank my advisor, Dr. Dennis c. Muniak, for services rendered and my wife, Iris K. Westcott for her infinite patience. AHSTRACT This project consists of a brief history of the Rhode Island economy, a discussion of the need for economic de­ velopment, and some of the advantages and disadvantages of development. It also discusses Rhode Island's assets, resources, and limiting factors to economic development, leading to recommendations of p olicy priorities and stra­ tegies for action to improve Rhode Island's economy. TABLE OF CONTENTS page I . INTRODUCTION 1 • II. BACKGROUND J. HISTORY J. THE NEED FOR ECONOMIC DEVELOPMENT 8 . III . ADVANTAGES AND DISADVANTAGES OF DEVELOPMENT 16. ADVANTAGES 16. DISADVANTAGES 18. IV . RHODE ISLAND ' S ASSETS 20 . NATURAL RESOURCES 20. COASTAL ZONE 20 . FRESH WATER RESOURCES 23. LAND 27 . OTHER NATURAL RESOURCES 28 . QUALITY OF LIFE 30. ECONOMIC ADVANTAGES 32 . PROXIMITY TO MARKETS 32 . SMALL FIRM SIZE 33 . LABDR 33 . TAXES 34 . AVAILABILITY OF CAPITAL JS . i .. GOVERNMENT ASSETS 35. GOVERNOR 35. DEPARTMENT OF ECONOMIC DEVELOPMENT J6 . STATEWIDE PLANNING PROGI,U.M 37. OTHER AGENCIES J8 . SUMMARY , SECTION IV J8 . v. KEY INDUSTRIES 41 . J EWELRY' AND SILVERWARE 41. SHIPBUILDING 42 . FISHING 42 . ENERGY PRODUCTION 4J. SHIPPING 44 . TOURISM 45 . OTHER INDUSTRIES 46 . VI . LIMITING FACTORS 49 . SHORTAGE OF INDUSTRIAL SITES 49 . INFRASTRUCTURE 51 . TRANSPORTATION 52 . Roads and Bridges 52 . Railroads 55 . Air Service 58 . Bay Shipping 60. WATER SUPPLIES 61 . SEWERS 62 . ii. ENERGY 64 . FEDERAL REGULATIONS AND SMALL BUSINESS 67 . UNEMPLOYMENT COMPENSATION 69 . UNSKILLED LABOR 71 . FACILITIES 72 . TOURISM 73 . COMMERCIAL FISHING 73 . IMAGE 75 . GOVERNMENT LIMITATIONS 76 . CITIZEN PARTICIPATION 78 . INTERGOVERNMENTAL RELATIONS 79 . GOVERNOR ' S TERM OF OFFICE 80 . SUMMARY SECTION VI 82 . VII . PRIORITIES AND STRATEGIES 89 . PRIORITIES 89 . STRATEGIES FOR IMPLEMENTATION 93 . SEWERS 94 . ENERGY' 95 . UNEMPLOYMENT COMPENSATION 95 . AIR SERVICE 96 . FEDERAL REGULATIONS AND SMALL BUSINESS 96 . ROADS AND BRIDGES 97 . LAND 98 . FACILITIES 98 . iii. IMAGE 99 . LAND MANAGEMENT POLICY' 99 . BAY SHIPPING 99 . WATER PROJECTS 100. ·- RAILWAY PRESERVATION 100 . GOVERNOR ' S TERM OF OFFICE 101 . APPENDIX iv. TABLES page TABLE I PRODUCTION WORKER EARNINGS IN ALL MANUFACTURING INDUSTRIES IN THE NORTHEAST - AUGUST 1978 11 • TABLE II VALUE ADDED BY MANUFACTURE PER MAN HOURS 1972 CENSUS OF MANUFACTURERS 11 • TABLE III ENERGY COSTS, NEW ENGLAND vs. U.S .. T.ABLE IV LABOR DISPUTE RECORD: 1971-1976 14 INDUSTRIAL STATES AND THE U.S. 77. v . FIGURES page FIGURE I DISTRIBUTION OF TOTAL WAGE AND SALARY EMPLOYMENT IN RHODE ISLAND 1958 & 1976 6 . FIGURE II UNEMPLOYMENT AS A PERCENTAGE OF CIVILIAN LABOR FORCE 1947-1 978 RHODE ISLAND AND U. S . FIGURE III RHODE ISLAND POPULATION BY AGE AND SEX 1970 U. S . CENSUS 13 . FIGURE IV RHODE ISLAND POTENTIAL GROUND WATER STUDY AREAS 24 . FIGURE V RHODE ISLAND MAJOR SURFACE WATER SUPPLIES 25 . vi . I I NTRODUCTION Before beginning to discuss economic development as it relates to Rhode Island, it seems worthwhile to discuss what is meant by "economic development" as referred to in this work. Economic development can take many forms and involve a multiplicity of actors, some of whose roles are not immediately apparent. The most common image of economic development is that of the process of firm attraction. Firm attraction is an important part of economic development. It usually con- sists of efforts to attract investment from firms located outside of the subject area. In the case of Rhode Island for example, it might involve attracting investment by firms from some other state or nation. It may involve the relocation of a firm or the construction of a new branch of a firm~ Whereas this is perhaps the best known meth od of ec­ onomic development, far too few firms relocate, or estab­ lish branches each year for attraction to fulfill all of the job need s of an expanding labor force such as Rhode Island's. A much more important form of economic develop­ ment is that of providing expansion incentives. This me­ thod focuses on firms indigenous to the subject area. In­ centives may take the form of tax incentives, provision of 1 • low interest capital, rezoning or other techniques. This should be the backbone of any economic development effort. As used in this work, economic development refers to any process which enhances the economic climate of an area. As such, this includes firm attraction and expan- sion incentives but is not limited to them. It includes many processes which may not normally be associated with economic development such as urban revitalization, housing improvements, education, and road construction as well as many others. Even such activities as litter clean up cam­ paigns can affect economic development by improving the appearance and image of an area. According to this interpretation, economic develop­ ment includes a variety of p a rticipants, as any individual or organization taking action that might enhance the econ­ omic climate of an area is involved in the process of econ- omic development. Conversely, any individual or organi- zation taking action which detracts from the economic cli­ mate of an area can be said to impede economic development. The use of economic development in this way is based on the conviction that economic development is a process which affects, and is affected by , anyone participating in economic activity. It is not the responsibility of any in- dividual or any individual government, but is the collec­ tive responsibility of all. 2. II BACKGROUND HISTORY It is easiest to understand the nature of the modern Rhode Island economy by examining Rhode Island's past ec- onomies. Settled in 1636 as a "lively experiment •••• in religious concernments" on the part of Roger Williams and followers, Rhode Island has a long history. Early settlers fished and farmed to sustain an agri­ cultural economy. New England's stony soils are less than optimum for agriculture, however, and agriculture soon gave way to trade, services and manufacturing. In 1793 the A- merican industrial revolution began in Pawtucket, Rhode Island with the construction of the first cotton mill in the nation by Samuel Slater. It was the first of many as, favored with a natural deep water port, Narragansett Bay, and supplied with abundant water powe~ from the state's rivers, Rhode Island industry flourished. Construction of railways in the 1800's further en­ hanced Rhode Island's industrial advantages as a major coastal rail line passed directly through the state. This served to link the seaports of Rhode Island, and Rhode Is­ land industry, more closely with the large market which developed with the concentration of population on the east coast. J. As a part of this population concentration, Rhode Island could provide ample labor for industrial growth. With an industrial emphasis on labor intensive, low value added manufacturing, Rhode Island offered abundant jobs to waves of immigrants who arrived seeking the "New World". Based in textiles, apparel, and metal working, Rhode Is­ land's economy flourished. World Wars brought the military to Rhode Island in considerable numbers. As Narragansett Bay's natural deep water port favored commercial shipping, it also favored military shipping, and Quonset Point Naval Air Station was one of the primary jumping off points for the European campaign of World War II Shortly after WWII however, Rhode Island's economy suffered a severe set back. The textile industry, plagued by intensive competition from imports and older, ineffi­ cient equipment, began a long term decline. As the move­ ment of population concentration westward had moved mar­ kets further west, and the evolution of new kinds of pow­ er had weaned industry from its dependence on water power, Rhode Island's competitive advantages for industrial loca­ tion were considerably diminished. Many textile firms moved to less developed areas, where labur was not yet unionized and labor and tax costs were comparatively less than those of New England. Rhode Island lost an estimated 47,000 textile jobs out of a to- 4. tal number of' jobs in the vicinity of' 300,000 for all types of' employment. 1 While this was a severe blow to the state economy, Rhode Island was not left without resources. It still had a seaport and many other industries besides textiles. Of these, the one which took prominence was the jewelry industry. This industry quickly flourished in the abun­ dant space left by the departure of textile firms. As it grew, it employed many of' those in the labor force who had been left unemployed by the decline of' the textile indus­ try.